Lan, O B; Ling, F Y Y and Soo, A (2014) Information feedback and bidders' competitiveness in construction bidding. Engineering, Construction and Architectural Management, 21(5), pp. 571-585. ISSN 0969-9988
Abstract
Purpose - Contractors rely on effective pricing methods in order to translate potential business into reality for long-term survival of their firms. This involves effective utilization of bidding feedback information toward winning jobs with high profit potential. The purpose of this paper is to experimentally investigate student (inexperienced) bidders' competitiveness under full and partial information feedback conditions when the number of competing bidders is large (n=12). Design/methodology/approach - This paper adopted an experimental research design. The design used between-subjects variation and involved information feedback as the treatment variable with 120 students who enrolled in a cost-estimating course participated in the experiment. Findings - The result shows that the variations in bids over time for both levels of information feedback are statistically significant. It is found that bidders with full bidding feedback information are more competitive than those with partial bidding feedback information. The bid-spread analysis and the identified effect of these two information feedback conditions on awarded contract sum, provide some further evidence that full information feedback condition would lead to lower average bids in construction bidding. Practical implications - The implication of the findings for construction clients is that they should provide as much bidding feedback information as possible so that the bid prices will be competitive. Originality/value - Given the ambiguity inherent in field data, this paper provides strong justification of using experimental research design in advancing the understanding of construction pricing under different information feedback conditions. In addition, it demonstrated the suitability of using student subjects in similar experiments in the context of construction bidding.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | competitiveness; information; construction; feedback; bidding |
| Index terms: | construction client, research design, pricing, survival, competitiveness, bidder, profit, experiment, estimating, bidding, suitability, evidence, variation, methodology |
| Subjects: | design criteria, market analysis, contractual condition, research methods, bidding, environmental science, financial and cost management, economic analysis, practitioner, data collection methods, evaluation and assessment methods, research design and methodology |
| Topics: | Contract Administration, Design Practice, Roles and Professions, Sustainability, Procurement, Cost Management, Business Strategy, Research Practice |
| Descriptive scope: | 5 PCTEA |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here